Roubini: no Glass-Steagall-Lite

when i hear the voice of reason, i recognize it immediately... it's simple, straightforward and completely understandable by even the most brain-cell challenged among us... it's also a pure breath of fresh air amidst all the spin and propagandized crap we're routinely fed...

We must be capable of going beyond the Volcker Rule, which is essentially Glass-Steagall-Lite. We need to go all the way and implement the kind of restrictions between commercial banking and investment banking that existed under Glass-Steagall.

[...]

If you look at the cases against Goldman Sachs and Morgan Stanley, leaving aside whether there was any fraud or illegal activity—that's for a court to decide—there is still a fundamental conflict of interest. These institutions are always on every side of every deal. That's an inherent conflict of interest that cannot be addressed with Chinese walls [internal company barriers between different aspects of its business].

There are no benefits from these economies of scale and scope, as we've seen from the disasters at Citigroup, AIG and others. And there are massive conflicts of interest. So I would separate all of these financial businesses under separate institutions, and I would go back to the kind of restrictions that we had under Glass-Steagall.

yes, nouriel, but that would put restrictions on unfettered greed and that is something our super-rich elites will simply not allow...

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